US stocks rose again on Wednesday as the Dow Jones Industrial Average hit an all-time high as investors felt the Fed had raised a “white flag” on key interest rates, Markets Insider reported.

Although the Federal Reserve, the Washington-based central bank, left key interest rates unchanged after Wednesday’s policy meeting, it released new forecasts for a 75 basis point cut next year . , even higher than in previous forecasts.

Jerome Powell, the chairman of the Federal Reserve, also sent an equally strong signal, saying at a press conference that the period of monetary policy tightening is likely over as inflation is finally returning to acceptable levels.

“Inflation is still coming down, the labor market is still balancing, and so far so good,” he said after the Fed’s last meeting, according to the Associated Press.

Powell also admitted that the warning he made in a speech last year that the “pain” of high unemployment would follow a sharp drop in inflation was too pessimistic.

In contrast, inflation has slowed to the Fed’s 2% target, while the unemployment rate is only 3.7% and the layoff rate is also low.

Wall Street is celebrating a cut in key interest rates in advance in a year of strong growth for the US stock market

Although the Fed indicated in its new report that the key interest rates could be cut only from the first months of next summer, optimism reached new heights on Wall Street, and investors and traders celebrated the new news as a real “white flag” raised by the central bank on restrictive monetary policy.

Under these conditions, the reference index Dow Jones Industrial Average rose on Wednesday to 37,094.85 points, setting a new record of exchange operations during the day, and also exceeding the record of the end of the trading session – 36,799.65 – set on January 4. last year.

The U.S. stock market was on course to end 2023 with a strong rally on expectations of rate cuts and worries about artificial intelligence, even if optimism tempered over the summer when it became clear the Fed would not cut interest rates this year. .

But it resumed growth starting in the third quarter amid data that showed the US economy had avoided the recession many economists and analysts had predicted.

In fact, the situation was quite the opposite: during this period, the world’s largest economy was experiencing rapid growth.

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